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I hope the above link is allowed by the moderators as it is not to a company with which I have any connections, other than just a lot of respect for them as an accounting firm.

The nub of the post is that HMRC took this guy through all the stages of HMRC internal review, right to a Tribunal, who told HMRC they needed to learn their own blooming tax laws!

For the last time HMRC a company director has no legal obligation to file a self-assessment tax return! End of story!

If the HMRC staff who frequent this site want to do something useful with your time, get your employers to remove this drivel from their website and Gov.uk forthwith.

This is why folks need accountants. 20 years ago I would be very confident in a tax enquiry that I would be up against someone who knew more about that area of tax law than I do. That's because tax is a subset of my knowledge base, and in the case of say a VAT enquiry VAT is a subset of my tax knowledge, whereas a VAT inspector spends 100% of his or her time on VAT.

But I can assure everyone reading this post that just about every enquiry I have had in the last 5 years I have known more about the area of tax law than the so-called "Inspector". In some cases I have had to explain the law either on the phone or in writing, or even both.

HMRC are an utter shambles compared to the UK tax service of 20 years ago.

you won't like this but none of the practices I've ever worked in take a principled view if it means they tell a director there is no need to file a return instead of being able to charge for doing the return for them

useful to know there is now a specific tribunal ruling however for when I next have the same "discussion"

you won't like this but none of the practices I've ever worked in take a principled view if it means they tell a director there is no need to file a return instead of being able to charge for doing the return for them

useful to know there is now a specific tribunal ruling however for when I next have the same "discussion"

Two wrongs don't make a right - I can't speak for other practices, but for my own firm, I've never registered a company director for SA and submitted SA returns unless there was a requirement for other reasons, such as being a h/r taxpayer (or now by virtue of being liable to the new dividend tax).

There was no need for the tribunal ruling. The LAW is clear, there is NO LAW automatically requiring company directors to file SA returns voluntarily. HMRC have been told many times that their website is WRONG IN LAW, but as with a lot of things, they just put their hands over their ears and chant "la la la". They could have easily asked for it to be included as part of any Finance Act over the past few years, but they couldn't be bothered to ask!!

Its true that a director does not have to voluntarily notify and submit their income tax return and should not be subject to Failure to Notify penalties.

However, as is the case with any UK taxpayer, if a notice to file a return is issued by HMRC (s.8 of the TMA ), then unless HMRC agree to rescind that notification to file, the return has to be filed on or before its due date. Even if they don't meet the criteria to notify HMRC that a return is required.

Thats the difference that the linked report fails to make clear. It's not enough to say that you dont meet the legal criteria if you fail to submit a tax return that HMRC have issued and so you dont need to submit it. This ruling should only apply where penalties for failing to notify hmrc are charged but where you had no need to notify hmrc under s.7 of the TMA.

I've had a quick look online but cannot find the FTT descision in full to read through, I'd be.interested to look through it if anyone can provide the link.

To equate judgement and wisdom with occupation is at best . . . insulting.

HMRC pay lip service to the law. That is the problem here. One of the basic reasons is that the quality of recruitment these days is so poor that in my personal experience - which I admit is not that much, as I only get 1 or 2 enquiries per year - it is only a minority of "Inspectors" these days who properly know what the tax law is in the area in which he or she is an "Inspector".

Unrepresented taxpayers assume that HMRC staff know the tax laws. This assumption is very dangerous, in the majority of tax enquiries schoolboy / schoolgirl errors are made by these "Inspectors" demonstrating simply an ignorance of UK tax law.

Its true that a director does not have to voluntarily notify and submit their income tax return and should not be subject to Failure to Notify penalties.

However, as is the case with any UK taxpayer, if a notice to file a return is issued by HMRC (s.8 of the TMA ), then unless HMRC agree to rescind that notification to file, the return has to be filed on or before its due date. Even if they don't meet the criteria to notify HMRC that a return is required.

Thats the difference that the linked report fails to make clear. It's not enough to say that you dont meet the legal criteria if you fail to submit a tax return that HMRC have issued and so you dont need to submit it. This ruling should only apply where penalties for failing to notify hmrc are charged but where you had no need to notify hmrc under s.7 of the TMA.

I've had a quick look online but cannot find the FTT descision in full to read through, I'd be.interested to look through it if anyone can provide the link.

The tribunal (linked above) findings are pretty damning. HMRC fail to provide any evidence they sent a notice to file. I think we can all assume (as the tribunal did) no such notice was sent. They then relied on the useless gov.uk website as evidence that self assessment was required.

Not helped by a self assessment submission process that omits even the most obvious checks. If I claim pension contributions for a higher rate taxpayer in excess of salary, then not only does the submission software not flag this up as incorrect, the taxpayers tax code is increased as a result!

Why would you think HMRC will change the website now? They've known for years their webpage and working practice was wrong - they've been told countless times by accountants and the accountancy profession. Typical arrogance of a public sector quango - they do what they want and sod the law/regulations unless it suits them!

Not helped by a self assessment submission process that omits even the most obvious checks. If I claim pension contributions for a higher rate taxpayer in excess of salary, then not only does the submission software not flag this up as incorrect, the taxpayers tax code is increased as a result!

Considering the HMRC website and HMRC coding issued for tax software can produce the wrong tax due in some other cases too, which HMRC have known about for a long time but have no plans to correct until next tax year, it's just par for the course of a public body not fit for purpose.

The tribunal (linked above) findings are pretty damning. HMRC fail to provide any evidence they sent a notice to file. I think we can all assume (as the tribunal did) no such notice was sent. They then relied on the useless gov.uk website as evidence that self assessment was required.

Not helped by a self assessment submission process that omits even the most obvious checks. If I claim pension contributions for a higher rate taxpayer in excess of salary, then not only does the submission software not flag this up as incorrect, the taxpayers tax code is increased as a result!

To a RAS scheme (eg personal pension/SIPP etc) presumably? If so it's working correctly.

You get your basic rate band extended to give higher rate relief, and that's normally reflected in the tax code.

You are allowed to contribute over 100% of salary to a pension, but aren't entitled to tax relief on the excess. This is something you need to tell the scheme, so they don't claim tax relief on that portion.

"Part of the problem stems from the fact that HMRC don't own the content on the Gov.UK website. It therefore takes time to get changes made"

Sorry that may explain recent incorrect information, but much of the made-up stuff on Gov.uk - including this particular piece of drivel about directors' tax returns - was simply copied and pasted from the HMRC website when it moved to Gov.uk.

"Part of the problem stems from the fact that HMRC don't own the content on the Gov.UK website. It therefore takes time to get changes made"

Sorry that may explain recent incorrect information, but much of the made-up stuff on Gov.uk - including this particular piece of drivel about directors' tax returns - was simply copied and pasted from the HMRC website when it moved to Gov.uk.

Having had the chance to sit down and read the decision I have to say that both the OP and the terrible article linked within it are both laying it on very very thick with regards to what the actual decision was.

To read the OP and the linked article you'd have thought that this was some huge new ruling that was going to change the way tax is administered in the UK.

In fact the issue about company directors gets less than 4 lines in the whole document, and is irrelevant to the final decision.

The Late filing and daily penalties were not quashed because of the issue regarding the taxpayer being a company director and whether there was any reliance on him to file a return voluntarily.

In fact the reason why the penalty appeal was successful at the tribunal was that the person/people who were there on HMRC's behalf could not verify which address the S316 (notice to file) was issued to, neither could they verify where the £100 late filing penalty notification was issued to, and as the taxpayer stated they had never received the notice then it was deemed it was not served, thus provding that the taxpayer had a reasonable excuse for not submitting their tax return on time.

No more to see here. Just the usual I Hate HMRC drivel we've seen from the same poster time, after time, after time.

To equate judgement and wisdom with occupation is at best . . . insulting.

I don't hate HMRC. Well no more than I have little time for incompetent people in general who point the finger at everyone else, as with the ridiculous mess at Grenfell Towers where that approach cost lives not just money. So apart from not following the law in this case, HMRC could not send out letters and penalty notices properly. But still took the case to Tribunal.

That's all right then. Hopefully all the people reading this are suitably reassured at the capabilities and competence of HMRC now.

Unfortunately, it is much worse than I hate HMRC, it is I don't trust HMRC. After all no-one loves a tax collector, that has been true for over 2k years. But trust is quite different & seems to have decreased over the last 20 years.

Whilst I have every respect for what you do on here & your knowledge & I am pleased to see you back, my interactions with HMRC over the last few years have not been inspiring.

In summary - call to say starting taking state pension whilst working - receive new tax code - not low enough - another call saying that - another code - taking too much (this is simple maths not rocket science) - I say taking too much this time - you will have to do self assessment then. So being punished for disagreeing.

Latest is a letter saying no longer have to do SA as they get info direct from DWP (which HMRC have had for years). I will be monitoring and have checked that I can go back to SA if I wish. It is about trust.

If you can convince them to bring in a new (I think would have to be voluntary) code that can take more than half your income in tax I would be extremely grateful (and HMRC would get their tax at least 9 months earlier) & I could take my rubbish personal pension.

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